A major new digital payments initiative has been launched across 14 African countries. Will it transform the digital payments landscape?
Airtel Africa, a provider of telecommunications and mobile money services, has announced a partnership with Mastercard, a technology company in the global payments industry, that will give over 100 million Airtel Africa mobile phone users across 14 African countries access to Mastercard’s global network.
A Mastercard virtual card will allow customers using the Airtel Money service, even those without a bank account, to make payments to local and global online merchants that accept Mastercard cards, while ensuring that the customer’s financial data is always secure and private.
In addition, Airtel Money customers will also be able to make in-person payments at outlets via quick response (QR) codes. In this case, payments are made from an Airtel mobile phone by scanning the QR code displayed at checkout, or by entering a merchant identifier, at any location worldwide where Mastercard QR is accepted. There are over one million merchant locations across Africa that accept Mastercard QR payments.
Airtel Money says its customers will also benefit from competitive pricing and preferential exchange rates for international payments, and gain access to other domestically relevant use cases, including bill payments, merchant payments and value-added services such as cash management solutions.
But will this be the game-changer that Airtel and Mastercard suggest? Quite possibly. The announcement of the deal makes the valid point that low-cost smartphones and faster networks will boost mobile internet connections and use in Africa. This, in turn, means a growing demand for online payments from both banked and – importantly for Africa – unbanked consumers, demand that this partnership aims to address.
It will also be interesting to see how other operators and card payment companies respond to this news. Not just end user take-up but competition will be a clear indicator of how transformative such initiatives really are.